There is currently a significant disparity between the number of patients who need lifesaving transplants and the number of donated human organs. Xenotransplantation is a way to address this disparity and attempts to enable the use of xenogeneic tissues have persisted for centuries. While immunologic incompatibilities have presented a persistent impediment to their use, encapsulation may represent a way forward for the use of cell-based xenogeneic therapeutics without the need for immunosuppression. In conjunction with modern innovations such as the use of bioprinting, incorporation of immune modulating molecules into capsule membranes, and genetic engineering, the application of xenogeneic cells to treat disorders ranging from pain to liver failure is becoming increasingly realistic. The present review discusses encapsulation in the context of xenotransplantation, focusing on the current status of clinical trials, persistent issues such as antigen shedding, oxygen availability, and donor selection, and recent developments that may address these limitations.